Employer Pension Contributions

LadyMissA

Savvy_Sue wrote: »

Yup, we pay into the stakeholder pension, but ONLY the one set up through our company (if that makes sense).

To clarify, if you come along and you already have a stakeholder (or any other kind of) pension, we don't pay into that. If you choose to set up a new stakeholder pension within the scheme which we have links to, we will.

Employers do not have to pay into one your company must be an exception

LadyMissA

Amanita wrote: »

Yes of course they can. They just don't HAVE to by law.

It was just the poster said they pay into it like it was a fact not what happens just where they work or I would have been in one myself at my old job but they wouldn't give you anything.

Amanita_2

LadyMissA wrote: »

Employers do not have to pay into one your company must be an exception

She didn't say they had to just that they do - it is actually pretty common for employers to make pension contributions for their employees. In some cases the employer requires that the employee contributes as well, sometimes they don't and the employee gets a pension without needing to contribute him/herself.

Actually this will be possible under autoenrollment. Whilst a minimum contribution of 8% of the band earnings must be made withat least 3% coming from the employer, it is possible for the employer to make the full contribution without requiring the employee to contribute at all

(I spend a good part of my working life setting up pension schemes for small and medium sized employers and have been giving seminars and presentations to employers on the subject of NEST for the last 18 months or so)

Amanita_2

LadyMissA wrote: »

It was just the poster said they pay into it like it was a fact not what happens just where they work or I would have been in one myself at my old job but they wouldn't give you anything.

It is employers like that who have brought about the whole autoenrollment changes.

It is actually very cost effective for an employer to use a pension scheme as part of the whole renumeration package but unfortunately not all employers take the advice that they should.

The new rules still don't go far enough in my opinion. The smallest employers are the ones who are least likely to have a pension scheme that they pay into and they will be the last tranche of employers to be brought in. The lowest paid are also excluded from autoenrollment as are the self employed.

LadyMissA

Amanita wrote: »

Actually this will be possible under autoenrollment. Whilst a minimum contribution of 8% of the band earnings must be made withat least 3% coming from the employer, it is possible for the employer to make the full contribution without requiring the employee to contribute at all

No employer that doesn't already have a pension scheme is likely to pay in 8%.

I have never worked for a company with a company pension and it's far too late to start one now but good for younger people in their 20's I guess.

Amanita_2

LadyMissA wrote: »

No employer that doesn't already have a pension scheme is likely to pay in 8%.

You may be surprised - it isn't 8% of the full salary remember - just earnings over the £5035 so not as much as you might think. But yes - most will want to pay as little as they can, as will most employees.

LadyMissA

Amanita wrote: »

You may be surprised - it isn't 8% of the full salary remember - just earnings over the £5035 so not as much as you might think. But yes - most will want to pay as little as they can, as will most employees.

8% is a lot if you earn good money.

Amanita_2

LadyMissA wrote: »

8% is a lot if you earn good money.

Curently capped at £3600.......which is still a lot of money I grant you but once you factor in the savings in corporation tax and ( if salary exchange is used) the employer NI savings as well. the cost is much less than this.

LadyMissA

Amanita wrote: »

Curently capped at £3600.......which is still a lot of money I grant you but once you factor in the savings in corporation tax and ( if salary exchange is used) the employer NI savings as well. the cost is much less than this.

So the company has to put in 3% on salaries over the figure you qouted before but no higher than a yearly contribtion of £3600?

That's going to be more then some old pay rises at my last co and they wont like that and I not sure many co's will.

Savvy_Sue

LadyMissA wrote: »

and they wont like that and I not sure many co's will.

Many companies did not like NMW. Many did not like the requirement to give paid leave to all staff, full and part-time. Parental leave isn't that popular either.

My original point (and I admit I didn't make it very well!) is that in all but the smallest companies THERE MUST ALREADY BE ACCESS TO A PENSION SCHEME OF SOME KIND.

So, even if the employer is not making contributions, they HAVE to have something set up, and they HAVE to facilitate the employee making contributions to that scheme if they so wish.

So when the OP says

miriam_d wrote: »

I was just wondering if anyone could tell me or point me in the direction of information about the legal obligations upon an organisation to provide pension information and contributions to their employees.

I say that unless it's a very small organisation (maybe fewer than 5 employees? not sure), the company is already obliged to provide information about whatever scheme they have set up, and to make payroll deductions if the employee requests it.

If I'm wrong about that, I'm sure Amanita will put me right!

I realise that my company does not HAVE to make contributions into the stakeholder scheme and I'm sorry if I gave that impression. But I also know that when the new legislation kicks in they will have to make a larger contribution! But all employees will also have to make a contribution.

Can't come soon enough, IMO, although I reckon it's going to be great fun getting staff signed up - even though it's a no-brainer as far as I can see, we struggle to get staff to fill in the forms needed for our stakeholder scheme. "Look, if you sign here, you'll get 2% of your salary going into a pension scheme. If you don't, you get nothing. Why not just sign???"